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American Business Conference, 4/4/89 [1]
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6
2
1
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
April 4, 1989
REMARKS BY THE PRESIDENT
TO THE AMERICAN BUSINESS CONFERENCE
Room 450
Old Executive Office Building
2:10 P.M. EDT
THE PRESIDENT: Welcome. Thank you for the welcome and
welcome to all of you. Roger Porter told me he'd had a chance to
visit with you all and I'm just delighted to be with you again. I
think I've met three times with this group over the last eight years.
As far as I'm concerned, at least, every meeting has been for me,
helpful -- either from garnering what's on your mind from the
question or, in one or two more kinder and gentler meetings, we had a
chance to visit around a little bit.
But among the friends -- I think many friends that I have
in this organization -- I want to single out your former Vice
Chairman, now the Secretary of Commerce, Bob Mosbacher. And like
everyone in this room, he knows what it means to take risks, start a
business, make it grow, and keep competitive. And I am just
delighted that he is here in Washington with us, giving up his
private enterprise, for a while at least, to be Secretary of
Commerce. He's on the cutting edge of our national effort to build a
better America. And for those of you who were with him in this
organization -- that's most in the room -- he's really doing a superb
job.
To be sitting in this room today, you've had to keep your
earnings at three times the growth of the economy, I'm told -- three
times the growth of the economy plus inflation -- a tremendous goal.
I hope that last category will not make it more difficult for you to
achieve -- (laughter) -- but we can talk about that later on. But
now, we're relying on Mosbacher to make that happen, not just for
ABC, but for every business in America. And so, in a time where the
United States creates positions of czar -- something that escapes me
as to why we turn to that nomenclature to solve our problems -- we
have a drug czar -- we will anoint Bob Mosbacher as the business czar
and then the rest of us can all pursue our favorite pastimes. Mine
is fishing and you guys can speak for yourselves. (Laughter.)
I don't know -- Mike, have you talked to this
distinguished group yet?
DR. BOSKIN: Tomorrow morning.
THE PRESIDENT: Tomorrow morning. I see Dr. Michael
Boskin here, and I am very proud to have him on our team. He and I
have a very direct relationship -- a personal relationship. And he
calls them as he sees them, as the umpires over in Baltimore said
- 2 -
You know the same lessons that I learned as a
businessman. You've got to have capital to grow. And what you don't
need, in my view, is higher taxes on the earnings, or higher taxes on
the workers, or higher taxes on those who invest money in the
businesses.
And right now the government is making too big a claim on
America's capital to cover our deficit. And that capital should be
invested in American businesses. And the best way to channel more
capital into productive investment is not through higher taxes.
And we're going through a real struggle right now --
trying to have enacted a budget which I sent to the Hill a while back
that did hold the line on taxes. And it's tough. It's a difficult
negotiation, but I can tell you, I have been pleased with the way the
budget document was received by the Congress. Nobody jumped up and
seconded the motion and agreed that it ought to be passed exactly as
it was presented by me and then by Dick Darman. But the response has
been good. And I think that signifies that the Congress as well as
the Executive Branch is listening to the American people -- are
listening to the American people -- people saying we've got to do
something about the deficit.
So the answer -- spending restraint. And again, I would
readily tell you that it's very, very difficult. The working paper
that you released last month was another reminder that the deficit
ought to be brought under control. Accountability in government
demands that we put an end to the spending spiral.
You know, when George Kaufman -- that famous wit from the
Algonquin Round Table -- was at a party, he heard a self-made
millionaire boasting to a circle of people, "I wish I was born into
the world without a single penny. And Kaufman answered, "Oh really?
When I was born, I owed twelve dollars." (Laughter.)
Well, we don't have to let the deficit play a cruel joke
on future generations. Next year alone -- Fiscal Year 1990 -- and
most of you are familiar with this figure -- but federal revenues
will rise by more than $80 billion -- with no tax increase.
Eighty-billion dollars more coming into the government just under the
existing tax structure.
And so, what we're going to do is meet or
beat the Gramm-Rudman targets.
Our budget consultations with Congress so far have been
going well. We're determined to work with the Congress, as I said,
and we're going to continue to approach the matter in one of
cooperation. There will be some tough, you know, dividing points
along the way. But I think Dick Darman would tell you that so far
we've been pleased.
To spur greater investment, there is one area where we
need to bring taxation down. And I remain convinced that'll mean
more revenues to the federal government. And this is our proposal to
bring down the taxation on -- the rate on capital gails. We've got
to get it more in line with our trading partners. In the budget
we've proposed, we want to restore the differential to 15 percent on
long-held assets.
- 3 -
fair shake for every American. And they all come after me, saying,
"This is a tax break for the rich, and I'm going back, saying,
"Steiger Amendment -- Steiger Amendment, 19" -- what was it, "'78."
Worked just the opposite -- it brought in more revenues to the
federal government and created more jobs.
We want to build on the energy and the initiative of
American business -- without burdensome mandates that only enforce
solutions of uniform mediocrity. Now, we don't want to limit the
flexibility of managers and workers, who are trying to find their own
best solutions. Many are already succeeding, as you know.
The Chamber of Commerce estimates suggest that workers
are receiving more fringe benefits than ever before. Total benefits
in 1987 were up 163 percent in a decade. And it is the market in our
system. It is the market -- not government -- that is responsible
for most of this growth.
Nearly 70 percent of growth in benefits is due to
voluntary action by employers. Only 30 percent mandated government
requirements. And I want to keep it that way. Our friends in Europe
have tried mandated benefits, and they haven't had much success. And
I've talked to the political leaders, and I'm sure you've talked to
many of the business leaders. And I expect almost to a person, man
or woman in business, they agree with that.
They're now looking for ways over there to free up
enterprise American style and make it more flexible, not less. And
for us to go toward mandated benefits would be, as Yogi Berra put it,
"Like deja vu all over again." (Laughter.)
America is going to be more competitive if we continue to
resist the temptation to heap burdensome mandates on the productive
private sector. And so they go after me for an unwillingness to
support a wide menu of mandated benefits. But I don't think there is
anything kinder and gentler about rendering businesses noncompetitive
in world markets, because that will mean fewer jobs. And that is the
worst thing that we need in economic times such as these.
A hallmark of this administration, I hope, will be our
focus on the future -- the importance we attach to making the right
kinds of investment. There can be no investment more urgent than
education. And in this, all of us have a stake. So a word about
that.
As labor markets continue to get tighter in the coming
years, many of you are going to be facing shortages of skilled
people. Some managers are already worried about a scarcity of
science and engineering graduates. And you've all read the surveys
that show many foreign students outperforming our own.
Although our best students can compete with anyone in the
world, the challenge we face is to adapt our educational system so
that all of our students receive the skills they need to share in
that prosperity -- my administration has made, rhetorically, and now
wants to make in terms of action, education a national priority. Our
program is based on four principles: Rewards excellence, helps those
- 4 -
matching grants for these historically black colleges and
universities which do occupy -- I believe we would all agree -- a
unique and vital position in American higher education.
We're committed to a program of reform that will give our
young people a solid foundation for the future, but to make lasting
improvements, we need to get all of the players -- administrators,
school boards, local business leaders, parents, teachers' unions --
around the table working together. And this will demand
accountability from all of us. It's going to require the best kind
of collective effort from all directions, but it holds the promise of
real progress.
Many of you have been prime movers, spending a remarkable
amount of your own time making good on that promise. More than a
third of you serve on local school boards, public or private -- on
the board of a local college or a university. We talk about funds at
the federal level. The federal government puts up seven percent of
the total tab for educational funding, and the total -- I just came
from lunch with Larry Cavazos, our Secretary of Education -- I
believe the figure he used -- the amount that's being spent on
education today is something like $330 billion.
So it isn't necessarily a shortage of funds, and that's
what some of these ideas that I'm talking about here take into
consideration. Several of you have established a program with 1
local community college or you've "adopted" a school, or taught
part-time, or promoted science education across a school district.
And that is the kind of involvement that, while it isn't always easy,
leads to the kind of educational reform that lasts. And it places
you among the "thousand points of light" that I talk about that do
spread hope and opportunity. We're not going to whip the educational
problem in this country by everybody running over to the Department
of Education. It is a thousand points of light. It is parents that
care and school boards and PTAs and good administrators and teachers
at the local level.
And SO I would simply encourage you to continue an active
role in your communities. There isn't a better answer. By investing
your time and talents towards the education of our young, you're
helping to bring about something vital -- a fundamental cultural
shift that reasserts the value of learning in this country. You're
breathing new life into an idea that's always been a testament to the
American spirit: that doing well demands doing good.
So
nothing I might tell you would say it better than your
own mission statement, which says ABC executives "believe their own
business success carries with it a responsibility to help expand
economic opportunity throughout the economy."
As leaders -- not only in business but all across the
board in every sector of our society -- you know that the national
interest requires us to invest in the future. Education is the best
investment we can make, if we want to build a better America. And I
want to do my part in all of that.
Thank you all for coming, and I'd be glad to take a few
- 5 -
I'll tell you, there's a little Walter Mitty in me, and
I've always loved sports -- walk out there, and you're always
wondering about getting booed when -- any politician that goes to a
ballgame -- I don't want to get diverted here, but Reggie asked a
good question. So last year, I go to the Cincinnati -- the All Star
Game in Cincinnati, and we're in the middle of the campaign --
saying, "This is suicide, man, what are you doing going out here?
You know you're going to get booed."
So right there as I was about to walk out, I saw two
little leaguers -- one 11-year-old kid, big, tall guy -- you know,
and a little eight-year-old blonde girl. And I said, "Who are
these?" -- and they said, "Well, these are the little leaguers.
They're going out first."
So I got with them and I said, "You guys nervous?"
(Laughter.) And I said, "Well, why don't we all walk out together?"
(Laughter.) There wasn't a boo in the house. (Laughter and
applause.) It worked.
Okay. Sir?
Q
Mr. President, do you believe the training wage
proposal will pass?
THE PRESIDENT: For the first time, the training wage --
well, I refer to it also as a differential -- is getting strong
support on both sides of the aisle. The problem I face as President
is that I went up with a six months training wage and a $4.25 minimum
wage. And we've talked about it -- Michael Boskin and I and Roger
Porter and others, and we wrestled with the economics of it. And we
figured, this is the best offer.
And so, unlike the normal trading that goes on here, we
said -- let's -- and our Secretary of Labor wanted us to do it this
way, too -- Liddy Dole -- a very able woman.
Let's go with our best shot, and let's make very clear in
the testimony that that is our best shot. Now, what we saw in the
Congress was a pretty good bipartisan support for our proposal -- not
enough to get it through, but I've got to hold the line -- I have got
to hold the line on the grounds of economics, on the grounds of
making people understand that I was serious about that being the best
offer.
And so I think that if I do what I've just told you I
will do that there is a good chance to get a differential with a
reasonable increase on the minimum wage. But I talked here about I
don't want to see a proliferation of new mandated benefits. This is
a -- you might say "mandated," but I think we've got to be very
concerned about the inflationary aspects, I think we have to be
concerned about the counter-job aspects in some of these low-paying,
labor-intensive businesses, particularly in the service sector.
And I think our proposal would make a necessary
adjustment, but having the minimum wage would lessen the likelihood
of more unemplovment. So I hope it works. I know we're aoing to
- 6 -
-- a proud member -- that part of the problem was the size of the
bill that comes down here. The one that comes to mind that he did
veto was the defense appropriations bill. And there were all kinds
of statements of concern that that would unravel the military and all
of that, and it didn't; the Congress went back and made an
adjustment.
So, we do not control, my party, either side of the
Congress. And I think there will be times when we have to say, look,
this is what I believe, and then rally our third to defend the
President's position, and then go back.
I was using some rhetoric that was kinder and gentler
than veto when I described my standing on the minimum just a minute
-- but let the Congress not misunderstand my determination. And this
one will be one where we have said, this is what we can do. And I,
with respect, would recognize the position of other members of
Congress on it, but I've got to stay with this. And I'm going to
stay with it and I hope it'll send the kind of signal that will have
an ameliorating effect on other pieces of legislation.
I'll tell you, there is an ingredient out there today
that's quite different. There's a recognition on the part of members
-- both sides of the aisle -- that the deficit really has to be
brought down and that some of the programs -- we're going to have to
constrain the spending growth.
Now, I was in Congress 20 years ago, and I really see a
different mood on the Hill. And the Secretary -- again, the
Secretary of Education and I had lunch. We talked about the
propensity of Congress to add, you know -- if you're for education,
you propose $1 billion dollars; if you're really for education, make
it $2 billion. You're for clean water, where you propose $11
billion, make it $12 billion.
I mean, there's a tendency now, on both sides, to
recognize we cannot go down that road. I will have to do some of
what you suggest, I know. Because they're not going to, obviously,
want to do it just exactly my way. But if we démonstrate a fairness,
in some areas, a place for compromise, but when there is no room for
compromise, be very frank about it and be up front about it, I hope
that we can get along together. But it's going to take doing some of
what you talked about here.
Q
Mr. President, is there any chance that your
administration might lead the way towards a tax on consumerism rather
than taxes on savings, such as a value-added tax or something of that
type?
THE PRESIDENT: Well, I don't want to even discuss the
tax on consumerism. There's a wide array of suggestions been made,
including a horrendously prolific value-added tax, which kind of is
painless at first, and then you wake up and realize that you've
increased the cost of a lot of goods out there. You have the
suggestion that people put a fuel tax on, or an import tax on oil
coming into this country.
But T really don't believe we should do that. I have got
- 7 -
heads up with a certain dignity.
And so, I have got -- and that's why when these mandated
benefits come down here, they have good titles on them, they have
things we're concerned about: Parental leave or child care, whatever
it is. And I'm sympathetic with many of the objectives. But as I
weigh them, I have a responsibility to say what kind of an effect are
they going to have on this best antidote to poverty, and that's a
job. And so we've got to resist some of the call for these good
things that have good titles if they undermine the fundamental thing
which is our ability to create jobs. So I will keep trying, keep
that philosophy in mind as we try to answer these pressing social
problems.
One word on child care, and then I promise to go
peacefully, Bobby. (Laughter.) But you know, business and religious
groups and family groupings and communities have started moving
pretty actively into the child care business. And you have a
different family structure now. You have many two-parent work force
people there -- husband and wife at work. And so I recognize this,
and I recognize the demand for child care. But as we formulated our
policy, we wanted to get something that would fit within the budget,
but we wanted to get something that would not rule out the diverse
answers that I mentioned in the beginning -- crowd businesses out
because they had to turn to highly-regulated, centralized child care
centers. Say to a religious group -- you can't do this any more,
that violates the ABC child care act. Say to a cluster of parents
that -- in a neighborhood that alternate taking care of the kids --
you can't do any of that because you're not subject to our
regulation. And so what I want to do on something -- a mandated
benefit of this nature, if you will, is keep it as flexible as
possible, preserve parental choice, and recognize this genius of
diversity that is our American way.
And it's not just child care, there's a whole array of
other mandated benefits that are coming down the pike that we have to
address ourselves to. Some we just say, look, we can't do it, we
can't afford that. And others we're going to have to say, well, we
can do a little here, but it's got to preserve this diversity and
it's got to strengthen family. I am tremendously concerned about the
erosion of the family unit in this day and age. And when you look at
some of the troubles we have on dropouts or look at some of the
troubles we have in keeping our kids out of the grips of these crack
pushers, you really have to go right back to the fundamentals in
terms of the family unit.
And, you know, people say, well, you're privileged,
you're blessed in that area; I am. And so I can't profess to know
what it is just from firsthand experience in the inner city, when a
family is divided and there's only one parent. But whatever we do at
the government level has got to see that we don't diminish family
units and, frankly, find a way to strengthen them. And that's why
this concept of parental choice I think is absolutely essential, that
it be woven into everything we do, wherever possible.
Listen, thank you all very much. Didn't mean to end with
a sermon, but thanks a lot for coming. (Applause.)
LANGE
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
April 4, 1989
REMARKS BY THE PRESIDENT
TO THE AMERICAN BUSINESS CONFERENCE
Room 450
Old Executive Office Building
2:10 P.M. EDT
THE PRESIDENT: Welcome. Thank you for the welcome and
welcome to all of you. Roger Porter told me he'd had a chance to
visit with you all and I'm just delighted to be with you again. I
think I've met three times with this group over the last eight years.
As far as I'm concerned, at least, every meeting has been for me,
helpful -- either from garnering what's on your mind from the
question or, in one or two more kinder and gentler meetings, we had a
chance to visit around a little bit.
But among the friends -- I think many friends that I have
in this organization -- I want to single out your former Vice
Chairman, now the Secretary of Commerce, Bob Mosbacher. And like
everyone in this room, he knows what it means to take risks, start a
business, make it grow, and keep competitive. And I am just
delighted that he is here in Washington with us, giving up his
private enterprise, for a while at least, to be Secretary of
Commerce. He's on the cutting edge of our national effort to build a
better America. And for those of you who were with him in this
organization -- that's most in the room -- he's really doing a superb
job.
To be sitting in this room today, you've had to keep your
earnings at three times the growth of the economy, I'm told -- three
times the growth of the economy plus inflation -- a tremendous goal.
I hope that last category will not make it more difficult for you to
achieve -- (laughter) -- but we can talk about that later on. But
now, we're relying on Mosbacher to make that happen, not just for
ABC, but for every business in America. And so, in a time where the
United States creates positions of czar -- something that escapes me
as to why we turn to that nomenclature to solve our problems -- we
have a drug czar -- we will anoint Bob Mosbacher as the business czar
and then the rest of us can all pursue our favorite pastimes. Mine
is fishing and you guys can speak for yourselves. (Laughter.)
I don't know -- Mike, have you talked to this
distinguished group yet?
DR. BOSKIN: Tomorrow morning.
THE PRESIDENT: Tomorrow morning. I see Dr. Michael
Boskin here, and I am very proud to have him on our team. He and I
have a very direct relationship -- a personal relationship. And he
calls them as he sees them, as the umpires over in Baltimore said
- 2 -
You know the same lessons that I learned as a
businessman. You've got to have capital to grow. And what you don't
need, in my view, is higher taxes on the earnings, or higher taxes on
the workers, or higher taxes on those who invest money in the
businesses.
And right now the government is making too big a claim on
America's capital to cover our deficit. And that capital should be
invested in American businesses. And the best way to channel more
capital into productive investment is not through higher taxes.
And we're going through a real struggle right now --
trying to have enacted a budget which I sent to the Hill a while back
that did hold the line on taxes. And it's tough. It's a difficult
negotiation, but I can tell you, I have been pleased with the way the
budget document was received by the Congress. Nobody jumped up and
seconded the motion and agreed that it ought to be passed exactly as
it was presented by me and then by Dick Darman. But the response has
been good. And I think that signifies that the Congress as well as
the Executive Branch is listening to the American people -- are
listening to the American people -- people saying we've got to do
something about the deficit.
So the answer -- spending restraint. And again, I would
readily tell you that it's very, very difficult. The working paper
that you released last month was another reminder that the deficit
ought to be brought under control. Accountability in government
demands that we put an end to the spending spiral.
You know, when George Kaufman -- that famous wit from the
Algonquin Round Table -- was at a party, he heard a self-made
millionaire boasting to a circle of people, "I wish I was born into
the world without a single penny." And Kaufman answered, "Oh really?
When I was born, I owed twelve dollars." (Laughter.)
Well, we don't have to let the deficit play a cruel joke
on future generations. Next year alone -- Fiscal Year 1990 -- and
most of you are familiar with this figure -- but federal revenues
will rise by more than $80 billion -- with no tax increase.
Eighty-billion dollars more coming into the government just under the
existing tax structure. And so, what we're going to do is meet or
beat the Gramm-Rudman targets.
Our budget consultations with Congress so far have been
going well. We're determined to work with the Congress, as I said,
and we're going to continue to approach the matter in one of
cooperation. There will be some tough, you know, dividing points
along the way. But I think Dick Darman would tell you that so far
we've been pleased.
To spur greater investment, there is one area where we
need to bring taxation down. And I remain convinced that'll mean
more revenues to the federal government. And this is our proposal to
bring down the taxation on -- the rate on capital gails. We've got
to get it more in line with our trading partners. In the budget
we've proposed, we want to restore the differential to 15 percent on
long-held assets.
- 3 -
fair shake for every American. And they all come after me, saying,
"This is a tax break for the rich, and I'm going back, saying,
"Steiger Amendment -- Steiger Amendment, 19" -- what was it, "'78."
Worked just the opposite -- it brought in more revenues to the
federal government and created more jobs.
We want to build on the energy and the initiative of
American business -- without burdensome mandates that only enforce
solutions of uniform mediocrity. Now, we don't want to limit the
flexibility of managers and workers, who are trying to find their own
best solutions. Many are already succeeding, as you know.
The Chamber of Commerce estimates suggest that workers
are receiving more fringe benefits than ever before. Total benefits
in 1987 were up 163 percent in a decade. And it is the market in our
system. It is the market -- not government -- that is responsible
for most of this growth.
Nearly 70 percent of growth in benefits is due to
voluntary action by employers. Only 30 percent mandated government
requirements. And I want to keep it that way. Our friends in Europe
have tried mandated benefits, and they haven't had much success. And
I've talked to the political leaders, and I'm sure you've talked to
many of the business leaders. And I expect almost to a person, man
or woman in business, they agree with that.
They're now looking for ways over there to free up
enterprise American style and make it more flexible, not less. And
for us to go toward mandated benefits would be, as Yogi Berra put it,
"Like deja vu all over again." (Laughter.)
America is going to be more competitive if we continue to
resist the temptation to heap burdensome mandates on the productive
private sector. And so they go after me for an unwillingness to
support a wide menu of mandated benefits. But I don't think there is
anything kinder and gentler about rendering businesses noncompetitive
in world markets, because that will mean fewer jobs. And that is the
worst thing that we need in economic times such as these.
A hallmark of this administration, I hope, will be our
focus on the future -- the importance we attach to making the right
kinds of investment. There can be no investment more urgent than
education. And in this, all of us have a stake. So a word about
that.
As labor markets continue to get tighter in the coming
years, many of you are going to be facing shortages of skilled
people. Some managers are already worried about a scarcity of
science and engineering graduates. And you've all read the surveys
that show many foreign students outperforming our own.
Although our best students can compete with anyone in the
world, the challenge we face is to adapt our educational system so
that all of our students receive the skills they need to share in
that prosperity -- my administration has made, rhetorically, and now
wants to make in terms of action, education a national priority. Our
program is based on four principles: Rewards excellence, helps those
- 4 -
matching grants for these historically black colleges and
universities which do occupy -- I believe we would all agree -- a
unique and vital position in American higher education.
We're committed to a program of reform that will give our
young people a solid foundation for the future, but to make lasting
improvements, we need to get all of the players -- administrators,
school boards, local business leaders, parents, teachers' unions --
around the table working together. And this will demand
accountability from all of us. It's going to require the best kind
of collective effort from all directions, but it holds the promise of
real progress.
Many of you have been prime movers, spending a remarkable
amount of your own time making good on that promise. More than a
third of you serve on local school boards, public or private -- on
the board of a local college or a university. We talk about funds at
the federal level. The federal government puts up seven percent of
the total tab for educational funding, and the total -- I just came
from lunch with Larry Cavazos, our Secretary of Education -- I
believe the figure he used -- the amount that's being spent on
education today is something like $330 billion.
So it isn't necessarily a shortage of funds, and that's
what some of these ideas that I'm talking about here take into
consideration. Several of you have established a program with 1
local community college or you've "adopted" a school, or taught
part-time, or promoted science education across a school district.
And that is the kind of involvement that, while it isn't always easy,
leads to the kind of educational reform that lasts. And it places
you among the "thousand points of light" that I talk about that do
spread hope and opportunity. We're not going to whip the educational
problem in this country by everybody running over to the Department
of Education. It is a thousand points of light. It is parents that
care and school boards and PTAs and good administrators and teachers
at the local level.
And so I would simply encourage you to continue an active
role in your communities. There isn't a better answer. By investing
your time and talents towards the education of our young, you're
helping to bring about something vital -- a fundamental cultural
shift that reasserts the value of learning in this country. You're
breathing new life into an idea that's always been a testament to the
American spirit: that doing well demands doing good.
So nothing I might tell you would say it better than your
own mission statement, which says ABC executives "believe their own
business success carries with it a responsibility to help expand
economic opportunity throughout the economy."
As leaders -- not only in business but all across the
board in every sector of our society -- you know that the national
interest requires us to invest in the future. Education is the best
investment we can make, if we want to build a better America. And I
want to do my part in all of that.
Thank you all for coming, and I'd be glad to take a few
- 5 -
I'll tell you, there's a little Walter Mitty in me, and
I've always loved sports -- walk out there, and you're always
wondering about getting booed when -- any politician that goes to a
ballgame -- I don't want to get diverted here, but Reggie asked a
good question. So last year, I go to the Cincinnati -- the All Star
Game in Cincinnati, and we're in the middle of the campaign --
saying, "This is suicide, man, what are you doing going out here?
You know you're going to get booed."
So right there as I was about to walk out, I saw two
little leaguers -- one 11-year-old kid, big, tall guy -- you know,
and a little eight-year-old blonde girl. And I said, "Who are
these?" -- and they said, "Well, these are the little leaguers.
They're going out first."
So I got with them and I said, "You guys nervous?"
(Laughter.) And I said, "Well, why don't we all walk out together?"
(Laughter.) There wasn't a boo in the house. (Laughter and
applause.) It worked.
Okay. Sir?
Q
Mr. President, do you believe the training wage
proposal will pass?
THE PRESIDENT: For the first time, the training wage --
well, I refer to it also as a differential -- is getting strong
support on both sides of the aisle. The problem I face as President
is that I went up with a six months training wage and a $4.25 minimum
wage. And we've talked about it -- Michael Boskin and I and Roger
Porter and others, and we wrestled with the economics of it. And we
figured, this is the best offer.
And so, unlike the normal trading that goes on here, we
said -- let's -- and our Secretary of Labor wanted us to do it this
way, too -- Liddy Dole -- a very able woman.
Let's go with our best shot, and let's make very clear in
the testimony that that is our best shot. Now, what we saw in the
Congress was a pretty good bipartisan support for our proposal -- not
enough to get it through, but I've got to hold the line -- I have got
to hold the line on the grounds of economics, on the grounds of
making people understand that I was serious about that being the best
offer.
And so I think that if I do what I've just told you I
will do that there is a good chance to get a differential with a
reasonable increase on the minimum wage. But I talked here about I
don't want to see a proliferation of new mandated benefits. This is
a -- you might say "mandated," but I think we've got to be very
concerned about the inflationary aspects, I think we have to be
concerned about the counter-job aspects in some of these low-paying,
labor-intensive businesses, particularly in the service sector.
And I think our proposal would make a necessary
adjustment, but having the minimum wage would lessen the likelihood
of more unemplovment. So I hope it works. I know we're going to
- 6 -
-- a proud member -- that part of the problem was the size of the
bill that comes down here. The one that comes to mind that he did
veto was the defense appropriations bill. And there were all kinds
of statements of concern that that would unravel the military and all
of that, and it didn't; the Congress went back and made an
adjustment.
So, we do not control, my party, either side of the
Congress. And I think there will be times when we have to say, look,
this is what I believe, and then rally our third to defend the
President's position, and then go back.
I was using some rhetoric that was kinder and gentler
than veto when I described my standing on the minimum just a minute
-- but let the Congress not misunderstand my determination. And this
one will be one where we have said, this is what we can do. And I,
with respect, would recognize the position of other members of
Congress on it, but I've got to stay with this. And I'm going to
stay with it and I hope it'll send the kind of signal that will have
an ameliorating effect on other pieces of legislation.
I'll tell you, there is an ingredient out there today
that's quite different. There's a recognition on the part of members
-- both sides of the aisle -- that the deficit really has to be
brought down and that some of the programs -- we're going to have to
constrain the spending growth.
Now, I was in Congress 20 years ago, and I really see a
different mood on the Hill. And the Secretary -- again, the
Secretary of Education and I had lunch. We talked about the
propensity of Congress to add, you know -- if you're for education,
you propose $1 billion dollars; if you're really for education, make
it $2 billion. You're for clean water, where you propose $11
billion, make it $12 billion.
I mean, there's a tendency now, on both sides, to
recognize we cannot go down that road. I will have to do some of
what you suggest, I know. Because they're not going to, obviously,
want to do it just exactly my way. But if we demonstrate a fairness,
in some areas, a place for compromise, but when there is no room for
compromise, be very frank about it and be up front about it, I hope
that we can get along together. But it's going to take doing some of
what you talked about here.
Q
Mr. President, is there any chance that your
administration might lead the way towards a tax on consumerism rather
than taxes on savings, such as a value-added tax or something of that
type?
THE PRESIDENT: Well, I don't want to even discuss the
tax on consumerism. There's a wide array of suggestions been made,
including a horrendously prolific value-added tax, which kind of is
painless at first, and then you wake up and realize that you've
increased the cost of a lot of goods out there. You have the
suggestion that people put a fuel tax on, or an import tax on oil
coming into this country.
But T really don't believe we should do that. I have got
- 7 -
heads up with a certain dignity.
And so, I have got -- and that's why when these mandated
benefits come down here, they have good titles on them, they have
things we're concerned about: Parental leave or child care, whatever
it is. And I'm sympathetic with many of the objectives. But as I
weigh them, I have a responsibility to say what kind of an effect are
they going to have on this best antidote to poverty, and that's a
job. And so we've got to resist some of the call for these good
things that have good titles if they undermine the fundamental thing
which is our ability to create jobs. So I will keep trying, keep
that philosophy in mind as we try to answer these pressing social
problems.
One word on child care, and then I promise to go
peacefully, Bobby. (Laughter.) But you know, business and religious
groups and family groupings and communities have started moving
pretty actively into the child care business. And you have a
different family structure now. You have many two-parent work force
people there -- husband and wife at work. And so I recognize this,
and I recognize the demand for child care. But as we formulated our
policy, we wanted to get something that would fit within the budget,
but we wanted to get something that would not rule out the diverse
answers that I mentioned in the beginning -- crowd businesses out
because they had to turn to highly-regulated, centralized child care
centers. Say to a religious group -- you can't do this any more,
that violates the ABC child care act. Say to a cluster of parents
that -- in a neighborhood that alternate taking care of the kids --
you can't do any of that because you're not subject to our
regulation. And so what I want to do on something -- a mandated
benefit of this nature, if you will, is keep it as flexible as
possible, preserve parental choice, and recognize this genius of
diversity that is our American way.
And it's not just child care, there's a whole array of
other mandated benefits that are coming down the pike that we have to
address ourselves to. Some we just say, look, we can't do it, we
can't afford that. And others we're going to have to say, well, we
can do a little here, but it's got to preserve this diversity and
it's got to strengthen family. I am tremendously concerned about the
erosion of the family unit in this day and age. And when you look at
some of the troubles we have on dropouts or look at some of the
troubles we have in keeping our kids out of the grips of these crack
pushers, you really have to go right back to the fundamentals in
terms of the family unit.
And, you know, people say, well, you're privileged,
you're blessed in that area; I am. And so I can't profess to know
what it is just from firsthand experience in the inner city, when a
family is divided and there's only one parent. But whatever we do at
the government level has got to see that we don't diminish family
units and, frankly, find a way to strengthen them. And that's why
this concept of parental choice I think is absolutely essential, that
it be woven into everything we do, wherever possible.
Listen, thank you all very much. Didn't mean to end with
a sermon, but thanks a lot for coming. (Applause.)
021969SS
Document No.
WHITE HOUSE STAFFING MEMORANDUM
4/1/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
SUBJECT:
PRESIDENTIAL REMARKS: AMERICAN BUSINESS CONFERENCE
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
ROGERS
BREEDEN
WINSTON
CARD
PINKERTON
CICCONI
BOSKIN
DEMAREST
FITZWATER
GRAY
HAGIN
REMARKS:
The attached has been forwarded to the President.
SEE CHRISTINA FOR CHANGES RE:
CHAMBER OF COMMERCE
RESPONSE:
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
THE WHITE HOUSE
WASHINGTON
1983 MAR 31 Fill
MARCH 31, 1989
INFORMATION
MEMORANDUM FOR THE PRESIDENT
FROM:
MARK LANGE Mf
SUBJECT:
SPEECH TO THE AMERICAN BUSINESS CONFERENCE
I. SUMMARY
Attached are draft remarks for your meeting on Tuesday, April 4,
to the American Business Conference (Room 450, OEOB).
II. DISCUSSION
The ABC is made up of CEOs from 100 of the fastest-growing
companies in America -- generally mid-sized. Between 80 and 90
members are expected to attend this briefing.
Your remarks are in two parts.
The first half covers the economics of enterprise -- sound
investment, no new taxes, and no mandated benefits. You then
discuss investment in education, and the role of groups like ABC.
The draft is 7 1/2 pages. Remarks are slated for 15-20 minutes.
(Lange/Martin)
March 31, 1989
6:30 p.m.
PRESIDENTIAL REMARKS:
AMERICAN BUSINESS CONFERENCE
ROOM 450, OLD EXECUTIVE OFFICE BLDG.
TUESDAY, APRIL 4, 1989
2:00 P.M.
I've met with this group three times, over the last eight
years -- and every meeting has been a resounding success. So
I've got a mind to ask: Why can't we equal or exceed that kind
of contact over the next eight years?
Among the many close friends I have in the ABC, I'd like to
mention your former vice chairman, now Commerce Secretary, Bob
Mosbacher. Like all of you, he knows what it means to take
risks, to start a business, make it grow, and keep it
competitive. Here in Washington, he is putting his. experience to
work. Bob is on the cutting edge of our national effort to Build
a Better America.
To be sitting in this room today, as ABC members, you've had
to keep your earnings at three times the growth of the economy,
plus inflation. Now, if Bob can just make that happen for every
business in America
I'll make him the Business Czar and we can
all go fishing.
You run the kind of high-growth businesses that represent
the most dynamic, entrepreneurial segment of the American
2
economy. And this government knows better than to fix what's
already working.
So this afternoon I'm going to address two areas of concern
to you: the economics of enterprise -- and the imperative for
education reform.
You folks know the same lesson that I learned as a
businessman. You need capital to grow. What you don't need is
higher taxes on your earnings, or higher taxes on your workers,
or higher taxes on those who invest their money in your firm.
Right now the government is making too big a claim on
America's capital to cover our deficit. That's capital that
should be invested in America's businesses. The best way to
channel more capital into productive investment is not higher
taxes. It's spending restraint.
The working paper you released last month was another
reminder that the deficit must be brought under control. So let
me reassure you -- this government will not become the fiscal
equivalent of Overeaters Anonymous. Accountability in government
demands that we put an end to this spending spiral.
You know, when George Kaufman -- that famous wit from the
Algonquin Round Table -- was at a party, he heard a self-made
3
millionaire boasting to a circle of people, "I was born into the
world without a single penny." And Kaufman answered, "Oh really.
When I was born, I owed twelve dollars."
Well, we don't have to let the deficit play a cruel joke on
future generations. Next year alone, federal revenues will rise
by more than $80 billion -- with no tax increase. And we're
going to use those funds to bring the deficit down below the
Gramm-Rudman-Hollings targets.
Our budget consultations with Congress are going well.
We're determined to work with this Congress -- we're counting on
their cooperation, to find answers we can all live with.
To spur greater investment in American business, we need to
bring our taxation of capital gains down -- in line with that of
our trading partners. In the budget we've proposed to Congress,
we want to restore the differential to 15 percent on long-held
assets.
How many of you, as you built your businesses, were able to
just walk up to a bank, and get a loan to cover your start-up
costs? Few, if any. Most of you probably raised capital by
offering people a share of the business -- and a stake in the
outcome.
4
Cutting the capital gains rate means more of that can
happen. It will give businesses more of the capital they need to
grow. It will bring in $4.8 billion more in tax revenues in
1990, according to the Treasury. And it will create more new
jobs.
That's no tax break for the rich. That's a fair shake for
every American.
We want to build on the energy and initiative of American
business -- without burdensome mandates that only enforce
solutions of uniform mediocrity. We don't want to limit the
flexibility of managers and workers, who are trying to find their
own best solutions. And you know, many are already succeeding.
Chamber of Commerce estimates suggest that workers are
receiving more fringe benefits than ever before. Total benefits
in 1987 were up 163 percent in a decade. And it is the market --
not government -- that is responsible for this growth.
Nearly eighty percent of growth in benefits is due to
voluntary action by employers. Only 21 percent is due to
government requirements. We want to keep it that way.
5
A "mandated benefit" is a contradiction in terms. How would
you feel if your doctor said, "Well, nothing's broken
but
we're going to put you in a full-body cast anyway." No thanks.
Mandated benefits are really mandated burdens. America will be
more competitive if we continue to resist the temptation to heap
burdensome mandates on the productive private sector.
A hallmark of this administration will be its focus on the
future -- and the importance we attach to making the right kinds
of investment. There can be no investment more urgent -- or more
compelling for the future of American business, and this country
as a whole, than education. In this, all of us have a stake in
the outcome.
As labor markets continue to get tighter in the coming
years, many of you are going to be facing shortages of skilled
people. Some managers are already worried about a scarcity of
science and engineering graduates. And you've all read the
surveys that show many foreign students outperforming our own.
Although our best students can compete with anyone in the
world, the challenge we face is to adapt our educational system
so that all of our students receive the skills they need to share
in that prosperity -- my Administration has made education a
national priority.
7
This will demand accountability from all of us. It will
require the best kind of collective effort, from all directions
-- but it holds the promise of real progress.
Many of you have been prime movers, spending a remarkable
amount of your own time making good on that promise. More than
a third of you serve on local school boards, public or private --
or on the board of a local college or university.
Others among you have established a program with a local
community college, or "adopted" a school, or taught part-time, or
promoted science education across a school district. That's the
kind of involvement that, while it isn't always easy, leads to
the kind of educational reform that lasts. It places you among
the "thousand points of light" that spread hope and opportunity.
You are part of what makes America special.
By investing your time and talents toward the education of
our young people, you're helping to bring about something vital
-- a fundamental cultural shift, that reasserts the value of
learning in this country. You're breathing new life into an idea
that has always been a testament to the American spirit: that
doing well demands doing good.
Nothing I might tell you would say it better than your own
mission statement, which says ABC executives "believe their own
8
business success carries with it a responsibility to help expand
economic opportunity throughout the economy. II
As leaders -- not only in business but in every sector of
our society -- you know that the national interest requires us to
invest in the future. Education is the best investment we can
make, if we want to Build a Better America.
Thank you. And God Bless you all.
MASTER II
(Lange/Martin)
March 30, 1989
1:30 p.m.
PRESIDENTIAL REMARKS:
AMERICAN BUSINESS CONFERENCE
ROOM 450, OLD EXECUTIVE OFFICE BLDG.
TUESDAY, APRIL 4, 1989
2:00 P.M.
I've met with this group three times, over the last eight
years --- and every meeting has been a resounding success. So
I've got a mind to ask: Why can't we equal or exceed that kind
of contact over the next eight years?
Among the many close friends I have in the ABC, I'd like to
mention your former vice chairman, now Commerce Secretary, Bob
Mosbacher. Like all of you, he knows what it means to take
start
make it grow and keepit competative.
risks, to build a business, and to keep America first. He's
Herein washington, he is putting his experience to work. Bob is oncele cutting edge of
our national ffort to Builda Beder Unerica.
already doing a superb job.
To be sitting in this room today, as ABC members, you've had
to keep your earnings at three times the growth of the economy,
plus inflation. Now, if Bob can just make that happen for every
business in America
I'll make him the Business Czar and we can
all go fishing.
You run the kind of high-growth businesses that represent
the most dynamic, entrepreneurial segment of the American
economy. And this government knows better than to fix what's
already working.
2
So this afternoon I'm going to address two areas of concern
to you: the economics of enterprise -- and the imperative for
education reform.
For anyone running a business, sound investment and
flexibility in the marketplace are more important than ever.
Your concern about a lack of savings is clearly motivated by a
most
lack of domestic investment capital for American industry. Now,
the personal savings rate has hit 5.2 percent or better for the
past three months. That S good news. But we cannot relax.
The working paper you released last month on overconsumption
-per
3/31
conversation
was another reminder that the deficit must be brought under
w/
pinkerton
on
control. So let me reassure you -- this government will not
the
resonance
of the phrase
become the fiscal equivalent of Overeaters Anonymous.
re:
Yax iner.
Accountability in government demands that we put an end to this
m.F.
spending spiral.
You know, when George Kaufman -- that famous wit from the
Algonquin Round Table -- was at a party, he heard a self-made
millionaire boasting to a circle of people, "I was born into the
world without a single penny.' And Kaufman answered, "Oh really.
When I was born, I owed twelve dollars."
Well, we don't have to let the deficit play a cruel joke on
3
future generations. Next year alone, federal tax revenues will
with ms toxincrease
rise by more than $80 billion And we re going to use those
funds to bring the deficit down below the Gramm-Rudman-Hollings
targets.
To spur greater investment in American business, we need to
bring our taxation of capital gains down -- in line with that of
our trading partners. In the budget we've proposed to Congress,
we want to restore the differential to 15 percent on long-held
assets.
How many of you, as you built your businesses, were, able to
aloan to cover your stortup costo.
just walk up to a bank and get equity? Few, if any. Most of you
probably raised capital by offering people a share of the
business -- and a stake in the outcome.
Cutting the capital gains rate means more of that can
happen. It will give businesses more of the capital they need to
1990
grow. It will bring in $4.8 billion more in tax revenues,
according to the Treasury. And it will create more new jobs.
That's no tax break for the rich. That's a fair shake for
every American.
Our
with Congress are going well.
The budget consultations are being held behind closed doors;
so I can't tell you how they're going. But we're determined to
rsl
4
work with this Congress -- we're counting on their cooperation,
to find answers we can all live with.
We want to build on the energy and initiative of American
will without
business and we re determined to avoid burdensome mandates
that only enforce solutions of uniform mediocrity. We don't want
to limit the flexibility of managers and workers, who are trying
to find their own best solutions. And you know, many are already
succeeding.
Chamber of Commerce estimates suggest that workers are
receiving more fringe benefits than ever before. Total benefits
in 1987 were up 163 percent in a decade. And it is the market --
not government -- that is responsible for this growth.
benefits
Nearly eighty percent of growth in the fringe share of
compensation is due to voluntary action by employers. Only 21
percent is due to government requirements. We want to keep it
that way.
A "mandated benefit" is a contradiction in terms. How would
you feel if your doctor said, "Well, nothing's broken
but
we're going to put you in a full-body cast anyway." No thanks.
(over)
A hallmark of this administration will be its focus on the
future -- and the importance we attach to making the right kinds
amandated benefit is really is mondated
America to be more competitive of we contenue
Cost. lfwe convenue We connot expect
to heap hurdensine mondation the
productive, private sector, no ma Her
how well-intentioned those mondates
are.
5
of investment. You don't make your money on short-term, day-to-
day trades -- you make it through sound long-term planning.
There can be no investment more urgent -- or more compelling
for the future of American business, and this country as a whole,
than education. In this, all of us have a stake in the outcome.
ontinue to
As labor markets get tighter in the coming years, many of
you are going to be facing shortages of skilled people. Some
managers are already worried about a scarcity of science and
engineering graduates. And you've all read the surveys that show
Pacific Rim students outperforming our own.
Our best students can compete with anyone in the world.
We're not on the verge of some intellectual brown-out. But in
order to give business more of the people it needs to compete --
to help build America's prosperity -- and to give more of our
young people the skills they need to share in that prosperity --
Administration
we have made education a national priority.
Los
sentence get Curt.
Tomorrow, I will send to the Congress an education package.
We want to reward merit schools that make progress in terms of
raising student achievement, and reducing drug use and drop-out
rates. We're promoting parental choice and educational quality,
through magnet schools of excellence.
6
We want to provide alternative certification of teachers and
principals, to broaden the pool of talent available; President's
Awards to outstanding teachers; Urban Emergency Grants to
provide comprehensive help in fighting drugs for school districts
under seige; a National Science Scholars program for high school
seniors; and additional endowment matching grants for
historically black colleges and universities, which occupy a
unique and vital position in American higher education.
We are committed to a program of education reform that will
give our young people a solid foundation for the future. But to
make lasting improvements in education, we'll need to get all of
the players -- superintendents and administrators, school boards,
Parent,
local business leaders teachers' unions -- around the table,
working together.
This will demand accountability from all of us. It will
require the best kind of collective effort, from all directions
-- but it holds the promise of real progress.
Many of you have been prime movers, spending a remarkable
amount of your own time making good on that promise. More than
a third of you serve on local school boards, public or private --
or on the board of a local college or university.
7
Others among you have established a program with a local
community college, or "adopted" a school, or taught part-time, or
promoted science education across a school district. That's the
kind of involvement that, while it isn't always easy, leads to
The american Business
the kind of educational reform that lasts. Consider yourself one
Conference is among the thousand points of light' that spread hope and oppor Junesty
in a thousand -- you know, points of light.
and make you are Part of what maces amount opecial
By investing your time and talents toward the education of
our young people, you're helping to bring about something vital
-- a fundamental cultural shift, that reasserts the value of
learning in this country.
You're breathing new life into an idea that has always been
a testament to the American spirit: that doing well demands
doing good.
Nothing I might tell you would say it better than your own
mission statement, which says ABC executives "believe their own
business success carries with it a responsibility to help expand
economic opportunity throughout the economy."
As business leaders, you understand the power of interests
msert
held in common. Education is the one investment that guarantees
economic opportunity -- for every individual, and every business
D
in America. Thank you. And God bless you.
PRESIDENTIAL REMARKS: AMERICAN BUSINESS CONFERENCE
ROOM 450, 0EOB
TUESDAY, APRIL 4, 1989
2:00 P.M.
I'VE MET WITH THIS GROUP THREE TIMES, OVER THE LAST
EIGHT YEARS -- AND EVERY MEETING, FOR ME AT LEAST,
HAS BEEN WORTHWHILE AND PRODUCTIVE. I AM GLAD TO BE
BACK.
- 2 -
AMONG THE MANY CLOSE FRIENDS I HAVE IN THE ABC, I'D
LIKE TO MENTION YOUR FORMER VICE CHAIRMAN, NOW COMMERCE
SECRETARY, BoB MOSBACHER. LIKE ALL OF YOU, HE KNOWS
WHAT IT MEANS TO TAKE RISKS, TO START A BUSINESS, MAKE
IT GROW, AND KEEP IT COMPETITIVE. HERE IN WASHINGTON,
HE IS PUTTING HIS EXPERIENCE TO WORK.
- 3 -
BoB IS ON THE CUTTING EDGE OF OUR NATIONAL EFFORT TO
BUILD A BETTER AMERICA.
To BE SITTING IN THIS ROOM TODAY, AS ABC MEMBERS,
YOU'VE HAD TO KEEP YOUR EARNINGS AT THREE TIMES THE
GROWTH OF THE ECONOMY, PLUS INFLATION.
- 4 -
Now, IF BoB CAN JUST MAKE THAT HAPPEN FOR EVERY
BUSINESS IN AMERICA... I'LL MAKE HIM THE BUSINESS CZAR
AND WE CAN ALL GO FISHING.
You RUN THE KIND OF HIGH-GROWTH BUSINESSES THAT
REPRESENT THE MOST DYNAMIC, ENTREPRENEURIAL SEGMENT OF
THE AMERICAN ECONOMY. AND THIS GOVERNMENT KNOWS BETTER
THAN TO FIX WHAT'S ALREADY WORKING.
- 5 -
So THIS AFTERNOON I'M GOING TO ADDRESS TWO AREAS OF
CONCERN TO YOU: THE ECONOMICS OF ENTERPRISE -- AND THE
IMPERATIVE FOR EDUCATION REFORM.
You FOLKS KNOW THE SAME LESSON THAT I LEARNED AS A
BUSINESSMAN. You NEED CAPITAL TO GROW.
- 6 -
WHAT YOU DON'T NEED IS HIGHER TAXES ON YOUR EARNINGS,
OR HIGHER TAXES ON YOUR WORKERS, OR HIGHER TAXES ON
THOSE WHO INVEST THEIR MONEY IN YOUR FIRM.
RIGHT NOW THE GOVERNMENT IS MAKING TOO BIG A CLAIM
ON AMERICA'S CAPITAL TO COVER OUR DEFICIT. THAT'S
CAPITAL THAT SHOULD BE INVESTED IN AMERICA'S
BUSINESSES.
- 7 -
THE BEST WAY TO CHANNEL MORE CAPITAL INTO PRODUCTIVE
INVESTMENT IS NOT HIGHER TAXES. It's SPENDING
RESTRAINT.
THE WORKING PAPER YOU RELEASED LAST MONTH WAS
ANOTHER REMINDER THAT THE DEFICIT MUST BE BROUGHT UNDER
- 8 -
CONTROL. ACCOUNTABILITY IN GOVERNMENT DEMANDS THAT WE
PUT AN END TO THIS SPENDING SPIRAL.
You KNOW, WHEN GEORGE KAUFMAN -- THAT FAMOUS WIT
FROM THE ALGONQUIN ROUND TABLE -- WAS AT A PARTY, HE
HEARD A SELF-MADE MILLIONAIRE BOASTING TO A CIRCLE OF
PEOPLE, "I WAS BORN INTO THE WORLD WITHOUT A SINGLE
- 9 -
PENNY." AND KAUFMAN ANSWERED, "OH REALLY. WHEN I WAS
BORN, I OWED TWELVE DOLLARS."
WELL, WE DON'T HAVE TO LET THE DEFICIT PLAY A CRUEL
JOKE ON FUTURE GENERATIONS. NEXT YEAR ALONE, FISCAL
YEAR 1990 FEDERAL REVENUES WILL RISE BY MORE THAN $80
BILLION -- WITH NO TAX INCREASE. AND WE'RE GOING TO
MEET OR BEAT THE GRAMM-RUDMAN-HOLLINGS TARGETS.
- 10 -
OUR BUDGET CONSULTATIONS WITH CONGRESS so FAR HAVE
BEEN GOING WELL. WE'RE DETERMINED TO WORK WITH THIS
CONGRESS -- WE'RE COUNTING ON THEIR COOPERATION, TO
FIND ANSWERS WE CAN ALL LIVE WITH.
To SPUR GREATER INVESTMENT IN AMERICAN BUSINESS, WE
NEED TO BRING OUR TAXATION OF CAPITAL GAINS DOWN -- IN
LINE WITH THAT OF OUR TRADING PARTNERS.
- 11 -
IN THE BUDGET WE'VE PROPOSED TO CONGRESS, WE WANT TO
RESTORE THE DIFFERENTIAL TO 15 PERCENT ON LONG-HELD
ASSETS.
How MANY OF YOU, AS YOU BUILT YOUR BUSINESSES, WERE
ABLE TO JUST WALK UP TO A BANK, AND GET A LOAN TO COVER
YOUR START-UP COSTS? FEW, IF ANY.
- 12 -
MOST OF YOU PROBABLY RAISED CAPITAL BY OFFERING PEOPLE
A SHARE OF THE BUSINESS -- AND A STAKE IN THE OUTCOME.
CUTTING THE CAPITAL GAINS RATE MEANS MORE OF THAT
CAN HAPPEN. IT WILL GIVE BUSINESSES MORE OF THE
CAPITAL THEY NEED TO GROW. IT WILL BRING IN $4.8
BILLION MORE IN TAX REVENUES IN 1990, ACCORDING TO THE
TREASURY. AND IT WILL CREATE MORE NEW JOBS.
- 13 -
THAT'S NO TAX BREAK FOR THE RICH. THAT'S A FAIR
SHAKE FOR EVERY AMERICAN.
WE WANT TO BUILD ON THE ENERGY AND INITIATIVE OF
AMERICAN BUSINESS -- WITHOUT BURDENSOME MANDATES THAT
ONLY ENFORCE SOLUTIONS OF UNIFORM MEDIOCRITY. WE DON'T
WANT TO LIMIT THE FLEXIBILITY OF MANAGERS AND WORKERS,
WHO ARE TRYING TO FIND THEIR OWN BEST SOLUTIONS.
- 14 -
AND YOU KNOW, MANY ARE ALREADY SUCCEEDING.
CHAMBER OF COMMERCE ESTIMATES SUGGEST THAT WORKERS
ARE RECEIVING MORE FRINGE BENEFITS THAN EVER BEFORE.
TOTAL BENEFITS IN 1987 WERE UP 163 PERCENT IN A DECADE.
AND IT IS THE MARKET --NOT GOVERNMENT -- THAT IS
RESPONSIBLE FOR THIS GROWTH.
- 15 -
NEARLY SEVENTY PERCENT OF GROWTH IN BENEFITS IS DUE
TO VOLUNTARY ACTION BY EMPLOYERS. ONLY THIRTY PERCENT
IS DUE TO GOVERNMENT REQUIREMENTS. WE WANT TO KEEP IT
THAT WAY.
OUR FRIENDS IN EUROPE HAVE TRIED MANDATED BENEFITS
-- AND THEY HAVEN'T HAD MUCH SUCCESS.
- 16 -
THEY'RE NOW LOOKING FOR WAYS TO FREE UP ENTERPRISE,
AMERICAN STYLE -- AND MAKE IT MORE FLEXIBLE, NOT
LESS. FOR US TO GO TOWARD MANDATED BENEFITS WOULD BE,
AS Yogi BERRA PUT IT, LIKE "DEJA VU ALL OVER AGAIN."
AMERICA WILL BE MORE COMPETITIVE IF WE CONTINUE
TO RESIST THE TEMPTATION TO HEAP BURDENSOME MANDATES ON
THE PRODUCTIVE PRIVATE SECTOR.
- 17 -
A HALLMARK OF THIS ADMINISTRATION WILL BE ITS FOCUS
ON THE FUTURE -- AND THE IMPORTANCE WE ATTACH TO MAKING
THE RIGHT KINDS OF INVESTMENT. THERE CAN BE NO
INVESTMENT MORE URGENT -- OR MORE COMPELLING FOR THE
FUTURE OF AMERICAN BUSINESS, AND THIS COUNTRY AS A
WHOLE, THAN EDUCATION. IN THIS, ALL OF US HAVE A STAKE
IN THE OUTCOME.
- 18 -
As LABOR MARKETS CONTINUE TO GET TIGHTER IN THE
COMING YEARS, MANY OF YOU ARE GOING TO BE FACING
SHORTAGES OF SKILLED PEOPLE. SOME MANAGERS ARE ALREADY
WORRIED ABOUT A SCARCITY OF SCIENCE AND ENGINEERING
GRADUATES. AND YOU'VE ALL READ THE SURVEYS THAT SHOW
MANY FOREIGN STUDENTS OUTPERFORMING OUR OWN.
- 19 -
ALTHOUGH OUR BEST STUDENTS CAN COMPETE WITH ANYONE
IN THE WORLD, THE CHALLENGE WE FACE IS TO ADAPT OUR
EDUCATIONAL SYSTEM so THAT ALL OF OUR STUDENTS RECEIVE
THE SKILLS THEY NEED TO SHARE IN THAT PROSPERITY -- MY
ADMINISTRATION HAS MADE EDUCATION A NATIONAL PRIORITY.
- 20 -
OUR PROGRAM IS BASED ON FOUR PRINCIPLES: IT REWARDS
EXCELLENCE, HELPS THOSE MOST IN NEED, DEMANDS
ACCOUNTABILITY, AND SUPPORTS GREATER FLEXIBILITY AND
CHOICE.
TOMORROW, I WILL SEND TO THE CONGRESS OUR EDUCATION
PACKAGE.
- 21 -
WE WANT TO REWARD MERIT SCHOOLS THAT MAKE PROGRESS IN
TERMS OF RAISING STUDENT ACHIEVEMENT, AND REDUCING DRUG
USE AND DROP-OUT RATES. WE'RE PROMOTING PARENTAL
CHOICE AND EDUCATIONAL QUALITY, THROUGH MAGNET SCHOOLS
OF EXCELLENCE.
- 22 -
WE WANT TO PROVIDE ALTERNATIVE CERTIFICATION OF
TEACHERS AND PRINCIPALS, TO BROADEN THE POOL OF TALENT
AVAILABLE; PRESIDENT'S AWARDS TO OUTSTANDING TEACHERS;
URBAN EMERGENCY GRANTS TO PROVIDE COMPREHENSIVE HELP IN
FIGHTING DRUGS FOR SCHOOL DISTRICTS UNDER SIEGE; A
NATIONAL SCIENCE SCHOLARS PROGRAM FOR HIGH SCHOOL
SENIORS;
- 23 -
AND ADDITIONAL ENDOWMENT MATCHING GRANTS FOR
HISTORICALLY BLACK COLLEGES AND UNIVERSITIES, WHICH
OCCUPY A UNIQUE AND VITAL POSITION IN AMERICAN HIGHER
EDUCATION.
WE ARE COMMITTED TO A PROGRAM OF EDUCATION REFORM
THAT WILL GIVE OUR YOUNG PEOPLE A SOLID FOUNDATION FOR
THE FUTURE.
- 24 -
BUT TO MAKE LASTING IMPROVEMENTS IN EDUCATION, WE'LL
NEED TO GET ALL OF THE PLAYERS -- ADMINISTRATORS,
SCHOOL BOARDS, LOCAL BUSINESS LEADERS, PARENTS,
TEACHERS' UNIONS -- AROUND THE TABLE, WORKING TOGETHER.
THIS WILL DEMAND ACCOUNTABILITY FROM ALL OF US.
- 25 -
IT WILL REQUIRE THE BEST KIND OF COLLECTIVE EFFORT,
FROM ALL DIRECTIONS -- BUT IT HOLDS THE PROMISE OF
REAL PROGRESS.
MANY OF YOU HAVE BEEN PRIME MOVERS, SPENDING A
REMARKABLE AMOUNT OF YOUR OWN TIME MAKING GOOD ON THAT
PROMISE.
- 26 -
MORE THAN A THIRD OF YOU SERVE ON LOCAL SCHOOL BOARDS,
PUBLIC OR PRIVATE --OR ON THE BOARD OF A LOCAL COLLEGE
OR UNIVERSITY.
OTHERS AMONG YOU HAVE ESTABLISHED A PROGRAM WITH A
LOCAL COMMUNITY COLLEGE, OR "ADOPTED" A SCHOOL, OR
TAUGHT PART-TIME, OR PROMOTED SCIENCE EDUCATION ACROSS
A SCHOOL DISTRICT.
- 27 -
THAT'S THE KIND OF INVOLVEMENT THAT, WHILE IT ISN'T
ALWAYS EASY, LEADS TO THE KIND OF EDUCATIONAL REFORM
THAT LASTS. IT PLACES YOU AMONG THE "THOUSAND POINTS
OF LIGHT" THAT SPREAD HOPE AND OPPORTUNITY. You ARE
PART OF WHAT MAKES AMERICA SPECIAL.
- 28 -
BY INVESTING YOUR TIME AND TALENTS TOWARD THE EDUCATION
OF OUR YOUNG PEOPLE, YOU'RE HELPING TO BRING ABOUT
SOMETHING VITAL -- A FUNDAMENTAL CULTURAL SHIFT, THAT
REASSERTS THE VALUE OF LEARNING IN THIS COUNTRY.
YOU'RE BREATHING NEW LIFE INTO AN IDEA THAT HAS ALWAYS
BEEN A TESTAMENT TO THE AMERICAN SPIRIT: THAT DOING
WELL DEMANDS DOING GOOD.
- 29 -
NOTHING I MIGHT TELL YOU WOULD SAY IT BETTER THAN
YOUR OWN MISSION STATEMENT, WHICH SAYS ABC EXECUTIVES
"BELIEVE THEIR OWN BUSINESS SUCCESS CARRIES WITH IT A
RESPONSIBILITY TO HELP EXPAND ECONOMIC OPPORTUNITY
THROUGHOUT THE ECONOMY."
- 30 -
As LEADERS -- NOT ONLY IN BUSINESS BUT IN EVERY SECTOR
OF OUR SOCIETY -- YOU KNOW THAT THE NATIONAL INTEREST
REQUIRES US TO INVEST IN THE FUTURE. EDUCATION IS THE
BEST INVESTMENT WE CAN MAKE, IF WE WANT TO BUILD A
BETTER AMERICA.
THANK YOU. AND GOD BLESS YOU ALL.
THE WHITE HOUSE
WASHINGTON
MARCH 31, 1989
INFORMATION
MEMORANDUM FOR THE PRESIDENT
FROM:
MARK LANGE Mf
SUBJECT:
SPEECH TO THE AMERICAN BUSINESS CONFERENCE
I. SUMMARY
Attached are draft remarks for your meeting on Tuesday, April 4,
to the American Business Conference (Room 450, OEOB).
II. DISCUSSION
The ABC is made up of CEOs from 100 of the fastest-growing
companies in America generally mid-sized. Between 80 and 90
members are expected to attend this briefing.
Your remarks are in two parts.
The first half covers the economics of enterprise -- sound
investment, no new taxes, and no mandated benefits. You then
discuss investment in education, and the role of groups like ABC.
The draft is 7 1/2 pages. Remarks are slated for 15-20 minutes.
on "KRISTEN"
To THE PRESIDENT
disk as ABC. DOC
4/1/89 1:30PM
(Lange/Martin)
March 31 1989
6:30 p.m.
PRESIDENTIAL REMARKS:
AMERICAN BUSINESS CONFERENCE
ROOM 450, OLD EXECUTIVE OFFICE BLDG.
TUESDAY, APRIL 4, 1989
2:00 P.M.
I've met with this group three times, over the last eight
years -- and every meeting has been a resounding success. So
I've got a mind to ask: Why can't we equal or exceed that kind
of contact over the next eight years?
Among the many close friends I have in the ABC, I'd like to
mention your former vice chairman, now Commerce Secretary, Bob
Mosbacher. Like all of you, he knows what it means to take
risks, to start a business, make it grow, and keep it
competitive. Here in Washington, he is putting his experience to
work. Bob is on the cutting edge of our national effort to Build
a Better America.
To be sitting in this room today, as ABC members, you've had
to keep your earnings at three times the growth of the economy,
plus inflation. Now, if Bob can just make that happen for every
business in America
I'll make him the Business Czar and we can
all go fishing.
You run the kind of high-growth businesses that represent
the most dynamic, entrepreneurial segment of the American
2
economy. And this government knows better than to fix what's
already working.
So this afternoon I'm going to address two areas of concern
to you: the economics of enterprise -- and the imperative for
education reform.
You folks know the same lesson that I learned as a
businessman. You need capital to grow. What you don't need is
higher taxes on your earnings, or higher taxes on your workers,
or higher taxes on those who invest their money in your firm.
Right now the government is making too big a claim on
America's capital to cover our deficit. That's capital that
should be invested in America's businesses. The best way to
channel more capital into productive investment is not higher
taxes. It's spending restraint.
The working paper you released last month was another
reminder that the deficit must be brought under control. So let
me reassure you -- this government will not become the fiscal
equivalent of Overeaters Anonymous. Accountability in government
demands that we put an end to this spending spiral.
You know, when George Kaufman -- that famous wit from the
Algonquin Round Table -- was at a party, he heard a self-made
3
millionaire boasting to a circle of people, "I was born into the
world without a single penny." And Kaufman answered, "Oh really.
When I was born, I owed twelve dollars."
Well, we don't have to let the deficit play a cruel joke on
future generations. Next year alone, federal revenues will rise
by more than $80 billion -- with no tax increase. And we're
going to use those funds to bring the deficit down below the
Gramm-Rudman-Hollings targets.
Our budget consultations with Congress are going well.
We're determined to work with this Congress -- we're counting on
their cooperation, to find answers we can all live with.
To spur greater investment in American business, we need to
bring our taxation of capital gains down -- in line with that of
our trading partners. In the budget we've proposed to Congress,
we want to restore the differential to 15 percent on long-held
assets.
How many of you, as you built your businesses, were able to
just walk up to a bank, and get a loan to cover your start-up
costs? Few, if any. Most of you probably raised capital by
offering people a share of the business -- and a stake in the
outcome.
4
Cutting the capital gains rate means more of that can
happen. It will give businesses more of the capital they need to
grow. It will bring in $4.8 billion more in tax revenues in
1990, according to the Treasury. And it will create more new
jobs.
That's no tax break for the rich. That's a fair shake for
every American.
We want to build on the energy and initiative of American
business -- without burdensome mandates that only enforce
solutions of uniform mediocrity. We don't want to limit the
flexibility of managers and workers, who are trying to find their
own best solutions. And you know, many are already succeeding.
Chamber of Commerce estimates suggest that workers are
receiving more fringe benefits than ever before. Total benefits
in 1987 were up 163 percent in a decade. And it is the market --
not government -- that is responsible for this growth.
Nearly eighty percent of growth in benefits is due to
voluntary action by employers. Only 21 percent is due to
government requirements. We want to keep it that way.
5
A "mandated benefit" is a contradiction in terms. How would
you feel if your doctor said, "Well, nothing's broken
but
we're going to put you in a full-body cast anyway. " No thanks.
Mandated benefits are really mandated burdens. America will be
more competitive if we continue to resist the temptation to heap
burdensome mandates on the productive private sector.
A hallmark of this administration will be its focus on the
future -- and the importance we attach to making the right kinds
of investment. There can be no investment more urgent -- or more
compelling for the future of American business, and this country
as a whole, than education. In this, all of us have a stake in
the outcome.
As labor markets continue to get tighter in the coming
years, many of you are going to be facing shortages of skilled
people. Some managers are already worried about a scarcity of
science and engineering graduates. And you've all read the
surveys that show many foreign students outperforming our own.
Although our best students can compete with anyone in the
world, the challenge we face is to adapt our educational system
so that all of our students receive the skills they need to share
in that prosperity -- my Administration has made education a
national priority.
6
Our program is based on four principles: it rewards
excellence, helps those most in need, demands accountability, and
supports greater flexibility and choice.
Tomorrow, I will send to the Congress our education package.
We want to reward merit schools that make progress in terms of
raising student achievement, and reducing drug use and drop-out
rates. We're promoting parental choice and educational quality,
through magnet schools of excellence.
We want to provide alternative certification of teachers and
principals, to broaden the pool of talent available; President's
Awards to outstanding teachers; Urban Emergency Grants to
provide comprehensive help in fighting drugs for school districts
under siege; a National Science Scholars program for high school
seniors; and additional endowment matching grants for
historically black colleges and universities, which occupy a
unique and vital position in American higher education.
We are committed to a program of education reform that will
give our young people a solid foundation for the future. But to
make lasting improvements in education, we'll need to get all of
the players -- administrators, school boards, local business
leaders, parents, teachers' unions -- around the table, working
together.
7
This will demand accountability from all of us. It will
require the best kind of collective effort, from all directions
-- but it holds the promise of real progress.
Many of you have been prime movers, spending a remarkable
amount of your own time making good on that promise. More than
a third of you serve on local school boards, public or private --
or on the board of a local college or university.
Others among you have established a program with a local
community college, or "adopted" a school, or taught part-time, or
promoted science education across a school district. That's the
kind of involvement that, while it isn't always easy, leads to
the kind of educational reform that lasts. It places you among
the "thousand points of light" that spread hope and opportunity.
You are part of what makes America special.
By investing your time and talents toward the education of
our young people, you're helping to bring about something vital
-- a fundamental cultural shift, that reasserts the value of
learning in this country. You're breathing new life into an idea
that has always been a testament to the American spirit: that
doing well demands doing good.
Nothing I might tell you would say it better than your own
mission statement, which says ABC executives "believe their own
8
business success carries with it a responsibility to help expand
economic opportunity throughout the economy. "
As leaders -- not only in business but in every sector of
our society -- you know that the national interest requires us to
invest in the future. Education is the best investment we can
make, if we want to Build a Better America.
Thank you. And God Bless you all.
TORRES, PRESIDENTIAL REMARKS:
FINAL
3/31/89
(Lange/Martin)
March 31, 1989
6:30 p.m.
AMERICAN BUSINESS CONFERENCE
ROOM 450, OLD EXECUTIVE OFFICE BLDG.
TUESDAY, APRIL 4, 1989
2:00 P.M.
I've met with this group three times, over the last eight
years -- and every meeting has been a resounding success. So
I've got a mind to ask: Why can't we equal or exceed that kind
of contact over the next eight years?
Among the many close friends I have in the ABC, I'd like to
mention your former vice chairman, now Commerce Secretary, Bob
Mosbacher. Like all of you, he knows what it means to take
risks, to start a business, make it grow, and keep it
competitive. Here in Washington, he is putting his experience to
work. Bob is on the cutting edge of our national effort to Build
a Better America.
To be sitting in this room today, as ABC members, you've had
to keep your earnings at three times the growth of the economy,
plus inflation. Now, if Bob can just make that happen for every
business in America
I'll make him the Business Czar and we can
all go fishing.
You run the kind of high-growth businesses that represent
the most dynamic, entrepreneurial segment of the American
2
economy. And this government knows better than to fix what's
already working.
So this afternoon I'm going to address two areas of concern
to you: the economics of enterprise -- and the imperative for
education reform.
You folks know the same lesson that I learned as a
businessman. You need capital to grow. What you don't need is
higher taxes on your earnings, or higher taxes on your workers,
or higher taxes on those who invest their money in your firm.
Right now the government is making too big a claim on
America's capital to cover our deficit. That's capital that
should be invested in America's businesses. The best way to
channel more capital into productive investment is not higher
taxes. It's spending restraint.
The working paper you released last month was another
reminder that the deficit must be brought under control. So let
me reassure you -- this government will not become the fiscal
equivalent of Overeaters Anonymous. Accountability in government
demands that we put an end to this spending spiral.
You know, when George Kaufman -- that famous wit from the
Algonquin Round Table -- was at a party, he heard a self-made
3
millionaire boasting to a circle of people, "I was born into the
world without a single penny." And Kaufman answered, "Oh really.
When I was born, I owed twelve dollars."
Well, we don't have to let the deficit play a cruel joke on
future generations. Next year alone, federal revenues will rise
by more than $80 billion -- with no tax increase. And we're
going to use those funds to bring the deficit down below the
Gramm-Rudman-Hollings targets.
To spur greater investment in American business, we need to
bring our taxation of capital gains down -- in line with that of
our trading partners. In the budget we've proposed to Congress,
we want to restore the differential to 15 percent on long-held
assets.
How many of you, as you built your businesses, were able to
just walk up to a bank, and get a loan to cover your start-up
costs? Few, if any. Most of you probably raised capital by
offering people a share of the business -- and a stake in the
outcome.
Cutting the capital gains rate means more of that can
happen. It will give businesses more of the capital they need to
grow. It will bring in $4.8 billion more in tax revenues in
4
1990, according to the Treasury. And it will create more new
jobs.
That's no tax break for the rich. That's a fair shake for
every American.
Our budget consultations with Congress are going well.
We're determined to work with this Congress -- we're counting on
their cooperation, to find answers we can all live with.
We want to build on the energy and initiative of American
business -- without burdensome mandates that only enforce
solutions of uniform mediocrity. We don't want to limit the
flexibility of managers and workers, who are trying to find their
own best solutions. And you know, many are already succeeding.
Chamber of Commerce estimates suggest that workers are
receiving more fringe benefits than ever before. Total benefits
in 1987 were up 163 percent in a decade. And it is the market --
not government -- that is responsible for this growth.
Nearly eighty percent of growth in benefits is due to
voluntary action by employers. Only 21 percent is due to
government requirements. We want to keep it that way.
5
A "mandated benefit" is a contradiction in terms. How would
you feel if your doctor said, "Well, nothing's broken
but
we're going to put you in a full-body cast anyway." No thanks.
Mandated benefits are really mandated burdens. We cannot expect
America to be more competitive if we continue to heap burdensome
mandates on the productive private sector -- no matter how well-
intentioned those mandates are.
A hallmark of this administration will be its focus on the
future -- and the importance we attach to making the right kinds
of investment. There can be no investment more urgent -- or more
compelling for the future of American business, and this country
as a whole, than education. In this, all of us have a stake in
the outcome.
As labor markets continue to get tighter in the coming
years, many of you are going to be facing shortages of skilled
people. Some managers are already worried about a scarcity of
science and engineering graduates. And you've all read the
surveys that show Pacific Rim students outperforming our own.
Our best students can compete with anyone in the world.
We're not on the verge of some intellectual brown-out. But in
order to give business more of the people it needs to compete --
to help build America's prosperity -- and to give more of our
6
young people the skills they need to share in that prosperity --
my Administration has made education a national priority.
Our program is based on four principles: it rewards
excellence, helps those most in need, demands accountability, and
supports greater flexibility and choice.
Tomorrow, I will send to the Congress an education package.
We want to reward merit schools that make progress in terms of
raising student achievement, and reducing drug use and drop-out
rates. We're promoting parental choice and educational quality,
through magnet schools of excellence.
We want to provide alternative certification of teachers and
principals, to broaden the pool of talent available; President's
Awards to outstanding teachers; Urban Emergency Grants to
provide comprehensive help in fighting drugs for school districts
under siege; a National Science Scholars program for high school
seniors; and additional endowment matching grants for
historically black colleges and universities, which occupy a
unique and vital position in American higher education.
We are committed to a program of education reform that will
give our young people a solid foundation for the future. But to
make lasting improvements in education, we'll need to get all of
the players -- administrators, school boards, local business
7
leaders, parents, teachers' unions -- around the table, working
together.
This will demand accountability from all of us. It will
require the best kind of collective effort, from all directions
-- but it holds the promise of real progress.
Many of you have been prime movers, spending a remarkable
amount of your own time making good on that promise. More than
a third of you serve on local school boards, public or private --
or on the board of a local college or university.
Others among you have established a program with a local
community college, or "adopted" a school, or taught part-time, or
promoted science education across a school district. That's the
kind of involvement that, while it isn't always easy, leads to
the kind of educational reform that lasts. It places you among
the "thousand points of light" that spread hope and opportunity.
You are part of what makes America special.
By investing your time and talents toward the education of
our young people, you're helping to bring about something vital
-- a fundamental cultural shift, that reasserts the value of
learning in this country. You're breathing new life into an idea
8
that has always been a testament to the American spirit: that
doing well demands doing good.
Nothing I might tell you would say it better than your own
mission statement, which says ABC executives "believe their own
business success carries with it a responsibility to help expand
economic opportunity throughout the economy."
As leaders -- not only in business but in every sector of
our society -- you know that the national interest requires us to
invest in the future. Education is the best investment we can
make, if we want to Build a Better America.
Thank you. And God Bless you all.
THE WHITE HOUSE
WASHINGTON
March 30, 1989
Memorandum to Chriss Winston
From:
Roger B. Porter
RBP
by
William L. Roper
WLR
Jim Pinkerton
Re:
ABC Draft
This draft does a good job of pushing two of our key themes,
but we need to recall our overall theme of "Building a Better
America. "
For example, we'd rewrite the 4th and 5th lines of graf 2 on
page 1 as follows: " risks, start a business, and make it grow
and keep it competitive. Here in Washington, he is putting his
experience to work. Bob is on the cutting edge of our national
effort to Build, a Better America."
We think that we should return to the concepts of
competitiveness and Building a Better America at least one more
time during the course of the speech. Other comments:
Pg. 2, graf 2. On p. 2, we suggest a rewrite of the entire
overconsumption/undersaving theme. At present it reads like one
of the speeches of our liberal friends who have recently been
converted to the fiscal discipline embodied by a tax increase.
The personal saving rate statistical series cited in the draft is
highly dubious. Mike Boskin, among others, has written papers
demonstrating its flaws. Instead, we should stress that more
saving and investing is good (and not bemoan the current level)
span
and challenge the Congress to do something about it:
&
"You folks know the same lesson that I learned as a
businessman. You need capital to grow. What you don't need is
meet
higher taxes on your earnings or higher taxes on your workers or
higher taxes on those who invest their money in your firm.
"Right now the government is making too big a claim on
America's capital to cover our deficit. That's capital that
should be invested in America's businesses. The best way to
channel more capital into productive investment is not higher
taxes. It's spending restraint."
(more)
2-2-2
3,1,1 Using the phrase "federal tax revenues" dilutes the
impact of our "no new taxes" pitch -- which we very much need to
include in this speech. We suggest rewriting as follows: "Next
year alone, federal revenues will rise by more than $80 billion
-- with no tax increase."
3,3,1 Change to: "How many of you, when you started your
businesses, were able to just walk up to a bank and get a loan to
cover your startup costs?"
3,6,1-2 There's nothing to be gained by talking about
closed door meetings. They sound undemocratic. Let's say
instead: "Our budget negotiations with the Congress are going
well. We look forward
"
4,2,2 Why repeat "we're determined" " so soon? Say "we will
"
oppose
4,5,1 We don't necessarily agree that "mandated benefit" is
a contradiction in terms. Admittedly, the phrase has an
Orwellian resonance, but we're missing the real point: a mandated
benefit is a mandated cost. How can we expect America to be more
competitive if we continue to heap burdensome mandates on the
productive private sector, no matter how well-intentioned those
mandates are?
5,4,6 Replace "we" with "my Administration"
weat al
that?
5,4-5 We have all agreed in the past on the importance of
specifics
emphasizing the four principles that guide the President's
education package (excellence, accountability, choice, and help
a
IMD's
for those that need it most). Before we start itemizing
initiatives we should seize this opportunity to proclaim our
rom
principles!
7,1,6 "one in a thousand," is a bit of a stretch for two
Chris
reasons. First, it doesn't capture the idiom (one in a
mixd pre. joke, we may the have
million). Second, the sentiment expressed here is not in tune
with the President's argument which is that the American spirit
of service is everywhere. Far better for the President to say
"The good works of the members of the American Business
Conference are part of what makes America special. You are among
the 'thousand points of light'" that spread hope and opportunity
to every corner of this great nation. "
(more)
3-3-3
7,5,1 We don't know what the first sentence means. It
sounds vaguely robber-baronish, what with "business
power
interests" all in the same line. Our goal in this
climactic graf is wrap our two themes into our one big
theme. How about this: "As leaders -- not only in business but
in every sector of our society -- you know that the national
interest requires us to invest in the future. Education is the
best investment we can make if we want to Build A Better
America. "
Insert b
#
CC:
Larry Lindsey
021969SS
Document No.
action D. Hyman
WHITE HOUSE STAFFING MEMORANDUM
3/30/89
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY: 3/31/89 NOON
PRESIDENTIAL REMARKS: AMERICAN BUSINESS CONFERENCE
SUBJECT:
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
STUDDERT
BATES
UNTERMEYER
BREEDEN
ROGERS
CARD
WINSTON
PINKERTON
CICCONI
BOSKIN
DEMAREST
FITZWATER
GRAY
HAGIN
REMARKS:
Please forward any comments to Chriss Winston, Rm. 122, x2930,
no later than NOON, Friday, March 31, 1989, with an info copy
to my office. Thank you.
RESPONSE:
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
1989
(Lange/Martin)
MMarch 30, 1989
30 1:30 p.m.
PM
PRESIDENTIAL REMARKS:
AMERICAN BUSINESS CONFERENCE
2:
ROOM 450, OLD EXECUTIVE OFFICE BLDG.
TUESDAY, APRIL 4, 1989
2:00 P.M.
I've met with this group three times, over the last eight
years -- and every meeting has been a resounding success. So
I've got a mind to ask: Why can't we equal or exceed that kind
of contact over the next eight years?
Among the many close friends I have in the ABC, I'd like to
mention your former vice chairman, now Commerce Secretary, Bob
Mosbacher. Like all of you, he knows what it means to take
risks, to build a business, and to keep America first. He's
already doing a superb job.
To be sitting in this room today, as ABC members, you've had
to keep your earnings at three times the growth of the economy,
plus inflation. Now, if Bob can just make that happen for every
business in America
I'll make him the Business Czar and we can
all go fishing.
You run the kind of high-growth businesses that represent
the most dynamic, entrepreneurial segment of the American
economy. And this government knows better than to fix what's
already working.
2
So this afternoon I'm going to address two areas of concern
to you: the economics of enterprise -- and the imperative for
education reform.
For anyone running a business, sound investment and
flexibility in the marketplace are more important than ever.
National
the
need
Your concern about a lack of savings is clearly motivated by
A
to increase
to enhance productivity by so
competent better compete the
lack of domestic investment capital for American industry, Now, world in
the personal savings rate has hit 5.2 percent or better for the
marketplac
past three months. That's good news. But we cannot relax. The primary
means of Raising National saving is to reduce the Federal budget deficit.
The working paper you released last month on overconsumption
was another reminder that the deficit must be brought under
control. So let me reassure you -- this government will not
become the fiscal equivalent of Overeaters Anonymous.
Accountability in government demands that we put an end to this
spending spiral.
You know, when George Kaufman -- that famous wit from the
Algonquin Round Table -- was at a party, he heard a self-made
millionaire boasting to a circle of people, "I was born into the
world without a single penny." And Kaufman answered, "Oh really.
When I was born, I owed twelve dollars."
Well, we don't have to let the deficit play a cruel joke
3
future generations. Next year alone, federal tax revenues will
rise by more than $80 billion. And we're going to use those
funds to bring the deficit down below the Gramm-Rudman-Hollings
targets.
To spur greater investment in American business, we need to
bring our taxation of capital gains down -- in line with that of
our trading partners. In the budget we've proposed to Congress,
we want to restore the differential to 15 percent on long-held
assets.
How many of you, as you built your businesses, were able to
just walk up to a bank and get equity? Few, if any. Most of you
probably raised capital by offering people a share of the
business -- and a stake in the outcome.
Cutting the capital gains rate means more of that can
happen. It will give businesses more of the capital they need to
grow. It will bring in $4.3 billion more in tax revenues,
according to the Treasury. And it will create more new jobs.
That's no tax break for the rich. That's a fair shake for
every American.
The budget consultations are being held behind closed doors;
so I can't tell you how they're going. But we're determined to
4
work with this Congress -- we're counting on their cooperation,
to find answers we can all live with.
We want to build on the energy and initiative of American
business -- and we're determined to avoid burdensome mandates
that only enforce solutions of uniform mediocrity. We don't want
to limit the flexibility of managers and workers, who are trying
to find their own best solutions. And you know, many are already
succeeding.
Chamber of Commerce estimates suggest that workers are
not
very verifable
receiving more fringe benefits than ever before. Total benefits
in 1987 were up 163 percent in a decade. And it is the market --
not government -- that is responsible for this growth.
who out did
Nearly eighty percent of growth in the fringe share of
is
compensation is due to voluntary action by employers. Only 21
Jarry
percent is due to government requirements. We want to keep it
is
that way.
using we
A "mandated benefit" is a contradiction in terms. How would
you feel if your doctor said, "Well, nothing's broken
but
-
we're going to put you in a full-body cast anyway." No thanks.
a
MAndated benefits are really mandated costs:
A hallmark of this administration will be its focus on the
future -- and the importance we attach to making the right kinds
5
of investment. You don't make your money on short-term, day-to-
day trades -- you make it through sound long-term planning.
There can be no investment more urgent -- or more compelling
for the future of American business, and this country as a whole,
than education. In this, all of us have a stake in the outcome.
As labor markets get tighter in the coming years, many of
you are going to be facing shortages of skilled people. Some
managers are already worried about a scarcity of science and
engineering graduates. And you've all read the surveys that show
Pacific Rim students outperforming our own.
Our best students can compete with anyone in the world.
We're not on the verge of some intellectual brown-out. But in
order to give business more of the people it needs to compete --
to help build America's prosperity -- and to give more of our
young people the skills they need to share in that prosperity --
we have made education a national priority.
Tomorrow, I will send to the Congress an education package.
We want to reward merit schools that make progress in terms of
raising student achievement, and reducing drug use and drop-out
rates. We're promoting parental choice and educational quality,
through magnet schools of excellence.
6
We want to provide alternative certification of teachers and
principals, to broaden the pool of talent available; President's
Awards to outstanding teachers; Urban Emergency Grants to
provide comprehensive help in fighting drugs for school districts
under seige; a National Science Scholars program for high school
seniors; and additional endowment matching grants for
historically black colleges and universities, which occupy a
unique and vital position in American higher education.
We are committed to a program of education reform that will
give our young people a solid foundation for the future. But to
make lasting improvements in education, we'll need to get all of
the players -- superintendents and administrators, school boards,
local business leaders, teachers' unions -- around the table,
working together.
This will demand accountability from all of us. It will
require the best kind of collective effort, from all directions
-- but it holds the promise of real progress.
Many of you have been prime movers, spending a remarkable
amount of your own time making good on that promise. More than
a third of you serve on local school boards, public or private --
or on the board of a local college or university.
7
Others among you have established a program with a local
community college, or "adopted" a school, or taught part-time, or
promoted science education across a school district. That's the
kind of involvement that, while it isn't always easy, leads to
the kind of educational reform that lasts. Consider yourself one
in a thousand -- you know, points of light.
By investing your time and talents toward the education of
our young people, you're helping to bring about something vital
-- a fundamental cultural shift, that reasserts the value of
learning in this country.
You're breathing new life into an idea that has always been
a testament to the American spirit: that doing well demands
doing good.
Nothing I might tell you would say it better than your own
mission statement, which says ABC executives "believe their own
business success carries with it a responsibility to help expand
economic opportunity throughout the economy."
As business leaders, you understand the power of interests
held in common. Education is the one investment that guarantees
economic opportunity -- for every individual, and every business
in America. Thank you. And God bless you.